Starting Up With Strategy
Bill Hendricks, BBA '98, is the CEO and co-founder of Common Form Tax Software. Launched in 2013, Common Form helps people file their taxes in minutes from their phone or computer. Before becoming an entrepreneur, Hendricks spent 15 years working in e-commerce.
After graduation from The University of Texas at Austin, Hendricks got his start at Dell Inc., an industry leader during the booming heyday of e-commerce. He was laid off in 2001 when the dot-com bubble burst, but he considers it to be a "blessing in disguise." He soon joined a six-person company where he got his first taste of working for a startup.
When the startup went under, Hendricks used his professional network to work in leadership positions for established companies, including Hewlett-Packard Co., Sony Corp., and Intuit Inc. But the startup life called him back, and he went on to found a company of his own. We spoke to Hendricks about his route from the McCombs School of Business to his San Diego-based company Common Form, and the lessons he's learned along the way.
How did you decide to create your own startup company, Common Form?
I'd gotten the entrepreneurial bug from my startup experience and from the consulting I did early in my career. I was pretty sure I wanted to do a startup, but doing it solo is a recipe for disaster. Then a couple of good friends left Intuit shortly after I did. Previously we worked together on the same team, building and operating TurboTax.com. We really enjoyed working with each other and had a great blend of skills and experience, so we decided to join forces. After kicking around a few ideas, we decided to build what we knew best — a tax-preparation product.
In starting Common Form, what have you learned about investors and their interests in startup companies?
Investors care about the team more than almost anything else. Ideas are a dime a dozen and technology is a commodity to them, so it comes down to their faith in the team's ability to execute. They look at several things when assessing a team, but two key ones are domain experience and hustle. It serves us very well that we are three ex-TurboTax employees building a tax product. If we didn't have tax expertise or we were tax guys building a social app, we'd be a lot less appealing to investors and probably wouldn't have gotten into [the mentorship-driven startup accelerator] Techstars. On hustle — they want teams that are relentlessly persistent and resourceful. If you can't be resourceful enough to get a warm intro to an investor — a pretty easy task — then why should that investor have confidence that you can succeed running a startup — an incredibly difficult task?
Through Common Form, what have you learned about your customer's needs?
From a customer perspective, one of the most valuable things we've learned, or are reminded of, is that you have to talk to your customers every day to build a good product. We do all our own customer support, and it is a tremendous opportunity to learn from customers. We've improved our product in countless ways thanks to their feedback. Something that really surprised us is that July was our busiest month in 2014. Busier than April, and we're a tax company! From talking to our July customers we learned that they were filing their taxes not to get their refund, but as a means to a different end. They needed to file their taxes as a prerequisite for applying for student financial aid or the Affordable Care Act.
How did you go about working in San Diego?
For the longest time I thought I was going to accept a great position with a top consulting firm, but the job was 100 percent travel, and as I'd got older my priorities changed. I'd just gotten married and bought a house. My wife and I wanted to settle down and enjoy San Diego. So I declined the offer graciously — this was important [to do] since the hiring manager of that job is still a mentor and reference for me — and surveyed the San Diego scene. Intuit was considered one of the best places to work in town, and I was eager to work for a company whose product was software, as opposed to doing e-commerce for hardware companies.
What was the experience like, and how was your time working there different from your previous positions?
I took a bit of a step down to get my foot in the door — I was used to leading teams and had just declined a director-level offer — and I joined as an individual contributor in their accounting professionals division. It didn't take long for me to prove myself though, and soon I was again leading teams, this time in the TurboTax Division. I led both product development teams and marketing teams, and learned a ton about user-centered design, agile development, and, of course, taxes. It was a great place to work and I enjoyed my time there. But after six years, I was ready for a change: to become an entrepreneur.
How do you think your time at McCombs prepared you for your career path, more specifically your start-up?
McCombs did a great job of preparing me for my career. Obviously I think the curriculum was great — I was an MIS major, so very applicable to my field — but the best part was learning how to interact and succeed while working in teams. The group projects we did, especially in my senior year classes, were very similar to the working environments in companies both big and small. It doesn't matter how smart you are or how good you are at your craft, you need to have the help of your team to accomplish anything meaningful.
What advice would you give to students who aspire to start their own company after graduation?
Do it! It will be one of the most rewarding experiences of your life. Now that that's out of the way: It's much harder than anyone can imagine before doing it by themselves. We hear about Uber's massive valuation or WhatsApp's acquisition, and it's easy to forget that they are the outliers, the very rare exceptions. Most startups fail, and of those that survive, most succeed much more modestly.
Of course, be ready to work insanely long hours. I pretty much work all the time I'm not sleeping, especially during tax season. You're not going to make much money. Even if you raise a lot of money, you're going to be making less in salary than your friends with corporate jobs, at least to start. Of course, your upside is much higher, too.
Finally, start thinking about people you can partner with. Most investors and advisors agree that the ideal founding team is three people: two technical and one "business" person. The "business" person should have relevant domain knowledge to solve your go-to-market problem. So, if you're an enterprise software company, that person better be good at B2B sales. If you’re a consumer product, they need to be good at digital marketing.